Enforcement: Commonwealth Bank of Aus pays AUD100,000 for reporting failures

Commonwealth has neither admitted nor denied the allegations made by ASIC, the Australian securities regulator which will take over much of the function of ASK in 2010.

But the facts that were not in dispute were that a notice on 13th November 2008, Commonwealth released an announcement to ASX which said "the Group's exposure to Lehman Brothers, Allco Financial Group Limited and ABC Learning Centres Limited will result in significantly higher first half provisions... Full year's impairment expense is expected to be between 40 and 50 basis points, with the majority in the first half."

At about 15:00 on 16th December, ASX says, Commonwealth "became aware of the following information." [Commonwealth] expects... the full year loan impairment expense to gross loans and acceptances is now expected to be around 60 basis points, with the majority in the first half [fy2009]"

Commonwealth notified ASX at approx 19:14 that evening. The notice said that the "full year loan impairment expense to gross loans and acceptances is now expected to be around 60 basis points, with the majority in the first half."

ASIC says that the delay between those two events was a failure to comply with the continuous disclosure obligations under the Corporations Act.

Commonwealth is not regarded as having failed to provide material information to the market operator, and there is no finding of wrongdoing.

The information arose as part of the preparation for Commonwealth to announce a capital raising.

on 16th December, Commonwealth attempted an AUD2,000 million capital raising, including an institutional placing at a price of AUD27 per share. That was placed via Merrill Lynch. During that process, Merrills offered to make confidential soundings of certain shareholders and it advised Commonwealth of the outcome at approx 15:00. The words complained of were included in that information.

Less than an hour later, at 15:59, Commonwealth sent a draft press release to Merrills "in the course of discussions about its attempted capital raising."

At 19:10, an announcement to ASX said that it had completed the capital raising, including the institutional placement, and included the statement detailed above.

The findings by ASIC were that "from 3pm on 16th December, ASX Listing 3.1 required Commonwealth to tell ASX of the information, between 3pm and 7.10 pm the information was not generally available and Commonwealth did not tell ASX of the information until about 7.10 pm.